Ingenious Games and HMRC’s allegations of dishonesty

Mr Justice Henderson (sitting in the Upper Tribunal) clarifies the rules which apply to litigants wishing to make allegations of dishonesty against their opponents’ witnesses. When the burden is on the taxpayer to prove its case, HMRC can deploy allegations of dishonesty as part of its attempts to test the taxpayer’s evidence without including them in their pleading and without giving advanced notice. However, professional duties and the rules of natural justice require that serious allegations must be put to the witness fairly and squarely, supported by evidence and the witness must be given the opportunity to rebut the allegations.